The long-simmering trade war between the U.S. and China is threatening to boil over.
On Monday, the Chinese government said it would hike tariffs on $60 billion worth of U.S. goods beginning June 1, according to news reports. The new tariffs will be as high as 25%.
The move is a response to President Donald Trump’s announcement last week of a 25% duty on nearly 6,000 categories of products coming in from China.
CNBC reports that 2,493 goods will be subject to the new 25% Chinese tariffs. Some examples include:
- Building stone, bricks, panels and floor tiles
- Pipes and tubes
- Wood flooring and carpets
- Some tools
- Bedding and sleeping bags
- Watches and clocks
- Musical instruments
- Alcoholic beverages such as gin, tequila and vodka
- Rice, corn and wheat flour
- Virgin olive oil, peanut oil, soybean oil, sunflower oil, coconut oil and sesame oil
- Soda and bottled water
- Coffee makers, hair dryers, microwaves, space heaters and electric ovens
- Microphones, headphones, speakers, recorders and DVD players
Natural resources and chemicals
- Rocks including granite, marble, chalk and sandstone
- Precious and semiprecious stones
- Metal ores
- Natural liquid gas
- Chemicals including chlorine, iodine and sulfuric acid
- Dyes and pigment
Other products are subject to lower Chinese tariffs. In total, 5,140 U.S. products will be subject to additional tariffs of 5%, 10%, 20% and 25%, according to Reuters.
What it means
So, what does it all mean? Some U.S. businesses could take it on the chin.
For example, in the wake of the announcement, Boeing’s stock dropped 4%. According to a USA Today report, Hu Xijin, editor-in-chief of the state-owned Chinese newspaper the Global Times, wrote on Twitter:
“China may stop purchasing US agricultural products and energy, reduce Boeing orders and restrict US service trade with China.”
Some of Trump’s critics have warned of broader effects.
“Raising tariffs will hurt both US & China economies + more importantly will hurt US farmers/consumers/businesses,” tweeted Republican Sen. Chuck Grassley of Iowa, a self-described family farmer.
However, there is a glimmer of hope for businesses worried about the impact of the new tariffs. According to Reuters, firms can apply for waivers to avoid the new tariffs.
What is your take on the new tariffs? Sound off in comments below or on our Facebook page.
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